AMD market share reaches 20 percent

Chip maker AMD has seen its fortunes rise in recent years. From being the first to ship a 64-bit implementation of the x86 instruction set that Intel then begrudgingly copied, to opening up new manufacturing fabs, the company has been riding a wave of good news, and with it, increasing sales.

For the fourth quarter of 2005, AMD shipped 21.4 percent of all desktop and laptop CPUs worldwide, up from 17.7 percent in the third quarter and 16.9 percent in Q1 2005. This represents the second time in recent history that the company has broken into the magical 20 percent range, the first being in 2001.

Strong sales of the company's Opteron line of server processors were the primary reason for the gain in market share. The 64-bit chips have been winning over the hearts and minds of corporate buyers as well as winning several benchmark competitions. However, AMD's mobile chip sales have been experiencing positive growth as well, rising from 12.2 percent to 15.1 percent in the last quarter.

The news comes on the heels of disappointing earnings results from Intel, but don't count the giant out just yet. Intel recently released the Core Duo series of mobile processors, which integrate a dual-core CPU architecture with a power envelope suitable for laptops. Most popular PC manufacturers like HP, Acer, Sony, and even Apple have announced laptops using the new chips that will be available soon. The mobile section of the computer market is currently experiencing the most growth of any segment, and AMD is not expected to release its dual-core Turion competitor until later this year. However, in the server arena, AMD is still ahead of Intel, with dual-core Opterons having been on the market since last April, and Intel's dual-core Xeon (which was rushed to market and still suffers design weaknesses compared to its rival) only making it to market last October.

AMD is reporting that some governmental agencies are now buying the company's chips, after dropping Intel-only purchasing deals in the wake of the anti-trust lawsuit AMD has filed against Intel. However, gains as a direct result of the lawsuit have not yet spread to the broader market.

In the future, AMD still faces many challenges. The company is behind Intel in the race to transition from 90mn to 65nm process technology. It lacks the focus and marketing campaign of Intel's Centrino, which combined low-power CPUs with integrated wireless networking to push laptop sales. And despite some chinks in the armor, computer giant Dell still refuses to sell complete AMD-based systems. However, a healthy AMD with increasing sales translates into increased competition for Intel, which directly benefits every PC buyer.